Ryanair chief: Europe to see record rise in air fares next year

Michael O'Leary, chief executive of the Ryanair group, Europe's largest budget carrier, expects air fares in Europe to rise by a record amount next year. He said ticket prices could climb by 20%, which would mean costlier flights for passengers and pressure on airline profitability.

O'Leary made the remarks on Tuesday at a press conference in Brussels, according to Ukrainian outlet Evropeiska Pravda, citing Bloomberg.

Why prices are rising

The war in the Middle East continues to push oil prices higher, and airlines are passing the extra fuel costs on to consumers. O'Leary argued, however, that even higher fuel surcharges will not offset the growth in fuel spending, so airline profitability will fall.

"Over the next 12 months we will see, I would say, the biggest rise in air fares in Europe's history. The question is whether this increase will be enough to cover the sharp rise in oil costs. I don't think it will," O'Leary said.

Limited protection against price swings

He noted that most European airlines, Ryanair included, will not have significant protection against oil price increases through financial instruments next year. Market supply is also shrinking as some carriers struggle, and tax increases are further worsening the outlook for the industry.

"Next year 85% of our fuel needs are unhedged, and most other European airlines are in a similar position," he said.

Flight numbers are growing

It has also been reported that the number of commercial flights in the European Union rose in every summer month compared with the previous year, even though fighting in the Middle East made aviation fuel more expensive. Media also reported on the risk of jet fuel shortages last summer.